You’ve had the same loyal car for years, but you’ve finally convinced yourself it’s time for an upgrade. Or maybe, you've just seen how much used cars are going for and want to cash in. The Zebra recently conducted a survey on car buying and found that 2 out of 5 people were motivated to buy a new car based on their current car's resale value. This indicates a significant influence of the resale value on purchasing decisions, highlighting the importance of understanding your options when it comes to parting ways with your vehicle.
Regardless of your motivation for selling, you want the old car gone. Should you trade it in? Put a for sale sign on it and park it on the side of the road?
The answer to this question will largely depend on how much effort you want to put into the whole process. And there’s a nearly equal list of pros and cons for both sides. Let’s take a closer look so you can decide which path is right for you!
Trading in your car definitely has its perks. If you’re thinking about trading in your vehicle, here are a few reasons it might be the right choice:
Perhaps the number one reason sellers consider trading in their car is the sheer convenience of doing so. The appraisal process takes about 15 - 30 minutes and then you’ll be offered a trade-in price. This streamlined process eliminates the need for advertising, negotiating with potential buyers, and other time-consuming tasks associated with private sales.
If you check around with multiple dealerships, the one that offers you the highest price for your trade-in may also offer you the best deal on a new car. If you’re planning on purchasing your next car from a dealer, you can apply the price of the trade-in to your new car as a down payment. This can significantly reduce the amount you need to finance or pay upfront.
When you sell your car yourself, you’ll want to take care of any major repairs, or else you could have a hard time finding a buyer at all. Dealerships may still take your car as a trade-in, even if there is some damage, especially if it’s an easy fix on their part. They’ll just deduct a chunk from the asking price. This saves you both time and money on repairs.
It's worth noting that in many states, trading in your old car can provide a tax credit on the purchase of a new one. This can further enhance the financial benefit of trading in your vehicle, making it a more attractive option for those looking to upgrade.
Trading in may not be the best option for every seller. Take a look at a few cons before jumping into a trade-in:
How much you get for your car in trade-in will depend on the make and model of your car, the condition it’s in, and how new it is. But in general, you won’t ever get as much from a trade-in as you would from a private-party sale. Dealerships need to make a profit, so if they give you full price for the car, there’s no wiggle room for them to make anything on the sale.
Before you even step foot in a dealership, take a few moments to find your trade-in value on Kelley Blue Book. They have a calculator that can give expected values. If you take this with you to the dealership, it can help you make sure you’re not getting lowballed.
Surprisingly, purchasing a new car at the dealership where you’re trading in may not be the best deal. A study from the USC Marshall School of Business found that, on average, buyers pay $990 more when they trade in their cars vs. buyers who don’t. So, brand loyalty doesn’t always pay off in the trade-in game. That’s why you need to negotiate your trade-in price and your new car price separately.
Trading your car in is as simple as walking into a dealership and telling a salesperson you’d like to talk about a potential trade-in. But there are a few things you can do to prepare. Follow these tips to ensure you’re getting the best trade-in value:
So, you’re thinking about selling your car on your own. While it’s not the most convenient option, it’s still a very good one. Here’s why DIYing your sale may be the right move:
Selling your car on your own means you’ll most likely be getting the best price. This is because only you are getting a share of the profits since there’s no intermediary that needs to resell the car later. Securing the highest price is likely one of the biggest reasons sellers choose to go the DIY route.
Before online options, selling your car took a little more legwork. Now, however, there are multiple sites where you can list your car for sale and have people contact you in a matter of days, if not hours. Plus, it’s become easier to spot scams so you can more easily avoid putting yourself in a dangerous situation.
When selling your car yourself, you have complete control over the selling process. From setting the price to choosing where and how to advertise, you can tailor your approach to suit your preferences and maximize your chances of a successful sale.
Selling your car can be deceivingly simple, but there’s a lot that can go wrong. Here are a few reasons you may want to consider a trade-in over selling on your own:
When you sell your car yourself, you’ll need to clean it up, advertise, meet with potential buyers, haggle when buyers offer way too low of a price, and make up the bill of sales and any other purchase agreements. Depending on where you live, this can take a few days or a few months.
Even after putting in a ton of work, you could end up taking a lower price than you wanted out of sheer desperation. For starters, most buyers will try to negotiate the price down. Staying strong and rejecting these offers can be more difficult than you might think.
Selling on your own isn’t always safe. There are risks associated with meeting strangers for test drives and completing transactions in person. While many sales go smoothly, there's always the potential for scams or dangerous encounters, especially if you're not careful.
When selling your car on your own, there’s a lot you can do to increase its value. Here are a few tips to get the most bang for your buck:
Sell if…
Trade-in if…
This comprehensive overview should provide you with the insights you need to make an informed decision about whether to trade in or sell your car privately. Remember to consider your specific circumstances, including your time, financial goals, and comfort level with the sales process, before making your choice.
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